Shell forecasts long recovery from Ida
Oil giant slates early next year for return to normal production
Royal Dutch Shell said its Gulf of Mexico oil production won’t fully recover from Hurricane Ida until early next year.
The Hague-based oil giant on Monday said a key offshore facility had “significant structural damage” from the Category 4 hurricane and will be offline for repairs for the rest of the year. The West Delta-143 serves as the transfer station for Shell’s oil production in the Mars oil field to onshore crude and natural gas terminals.
Offshore oil companies are still recovering from Hurricane Ida more than three weeks after the powerful storm made landfall in Louisiana on Aug. 29. As of Friday, nearly a quarter of U.S. oil production and about a third of natural gas production remains offline after Ida, according to the Interior Department.
Shell on Monday said about 40 percent of its offshore production in the Gulf remains offline.
The Energy Department on Thursday reduced estimates for oil production from the U.S. Gulf of Mexico after Hurricane Ida temporarily halted production at the majority of offshore platforms last month. U.S. Gulf oil output is expected to fall by 200,000 barrels per day in August to 1.5 million barrels per day. September production is expected to fall by 500,000 barrels per day to 1.2 million barrels per day.
Hurricane damage and power outages at several offshore platforms, refineries and pipelines have kept gasoline prices elevated, even as refiners switch from expensive summer blends to cheaper winter blends. Houston gasoline prices fell a penny per gallon in the past week to an average of $2.72, down 3.4 cents from a month ago, but 93.3 cents a gallon higher than a year ago, according to the fuel-price tracking website GasBuddy. Nationally, prices rose 1.3 cents to $3.18 a gallon, up 1.8 cents from a month ago and $1.01 higher than a year ago.
“Gas prices have been stuck in somewhat of a limbo and remain near 2021 highs long after Hurricane Ida has dissipated,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “The damage done to oil production has been left behind and so far has prevented prices from resuming their seasonal decline.”
Shell expects that production from its Olympus platform, which flows through its WD-143 “C” platform, to resume in the fourth quarter. Production from Shell’s Mars and Ursa platforms, which flows through its WD-143 “A” facility, is expected to resume in the first quarter of 2022.
Shell said its Perdido platform in the southwestern Gulf of Mexico was not affected by Ida, and its floating production platform — Turitella, also known as Stones — was moved out of the storm’s path and is back online.
The WD-143 platform is operated by Shell Pipeline Co. Shell Offshore Inc. has a 71.5 percent ownership stake in the platform and BP Exploration & Production Inc. has the remaining 28.5 percent ownership stake.